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As Cannabis Becomes Big Business, Who’s Getting Smoked?

Posted in Journalism, MintPress News, and SXSW

Originally published at MintPress News

AUSTIN, Texas — Hundreds of people marched to the White House early this month to show their support for less restrictive federal marijuana regulations and nationwide legalization.

In an act of peaceful protest, many at the event organized by DCMJ, a local legalization group, smoked marijuana, puffed on vaporizers containing hash oil, or consumed cannabis edibles. Although the activists at the April 3 rally were prepared to risk arrest, CNN reported just two citations.

Although possession of up to 2 ounces of pot has been decriminalized within Washington, D.C., smoking marijuana could be considered an act of civil disobedience because public consumption remains prohibited.

As the group staged their 4:20 “smoke in,” they briefly inflated a 51-foot inflatable joint emblazoned with a clear message: “Obama, deschedule cannabis now.”

Under the federal scheduling system, marijuana is still considered a Schedule I drug, on par with other drugs like cocaine and heroin which are legally considered to have neither medicinal benefit nor safe use.

Rescheduling marijuana would alleviate a host of problems for marijuana users across the country. In states that have legalized marijuana in some capacity, rescheduling would impact marijuana-related businesses that can’t find a bank willing to take their money, and it could encourage doctors to be less hesitant to prescribe marijuana to their patients.

The plight of the activists at the rally also illustrates, on a small scale, the problems created by the shifting landscape of marijuana legalization. Despite gathering in a city with relaxed cannabis restrictions, participants were still violating both federal and local laws by consuming a plant that’s widely regarded as safer than alcohol or tobacco and beneficial to many medical conditions, including PTSD and epilepsy.

Arrests continue nationwide — at a rate of about one arrest for possession per minute — and some people are slipping through the cracks even in states with some form of legal marijuana.

“Marijuana policy is going to evolve over time,” said Paul Armentano, deputy director of the National Organization For The Reform Of Marijuana Laws, in an interview with MintPress News. “This is not something where there can be a quick fix to address decades long institutional injustices.”

Despite real progress, Armentano sees a long road ahead.

“This is going to be an issue where proponents are going to continually have to revisit, they’re going to have to continually fight to maintain the gains they’ve made, and they’re going to continually have to fight for future progress.”

Big business and big barriers

Four states have legalized the recreational use of marijuana, and “cannabusinesses” are bringing in massive amounts of money — and tax revenue — in states with legal sales.

Washington state’s marijuana sales reached $709 million in 2015, an increase of 30 percent from the year before. For Colorado, the total sales reached $996 million.

“Colorado also collected more than $135 million in marijuana taxes and fees in 2015 — more than $35 million of which is earmarked for school construction projects,” noted Ricardo Baca, a staff writer for The Cannabist, The Denver Post’s cannabis news outlet.

The fledgling cannabis industry is attracting the attention of investors, with venture capital firms like Founders Fund’s Privateer Holdings investing millions into the field. Top recipients of their capital include Leafly, a Yelp-like site that helps marijuana buyers locate dispensaries and choose the right strain for their needs, and Marley Natural, a line of smoking accessories and hemp-based skincare products. From apps to vaporizers to up-market creams, the industry is moving out of the shadows and “novelty” shops, and into the mainstream. Beyond just sales of the plant, marijuana is big business.

Brendan Kennedy, CEO of Privateer Holdings, and Geoff Lewis, a partner at Founders Fund, appeared on a March 13 panel at the SXSW Interactive conference in Austin, Texas, where they described the barriers legal marijuana businesses face due to federal law.

Largely as a result of marijuana’s Schedule I status and the overall unfriendly federal environment, credit card providers refuse to work with cannabis dispensaries, forcing them to operate only in cash. Few banks are willing to work with them and the massive quantity of cash their businesses generate, especially when that cash sometimes reeks of marijuana smoke.

“It isn’t that banking is necessarily illegal, it just means it’s a lot more work for the banks to conduct business with companies in this industry,” explained Kennedy.

Working in cash leaves the businesses and their workers vulnerable not just to the law, but to criminals as well.

“It’s one of the things that makes this industry unsafe,” Kennedy said. “I’ve been in a room with one million dollars cash. I’ve been in a room with two million dollars cash. It’s not a good feeling, it’s really disconcerting, unsettling, and it smells really bad.”

Of course, marijuana businesses, with their increasingly deep pockets, can be powerful lobbyists for reform, both on the local and the federal level.

“I spend a lot of time in D.C., and there are a lot of politicians that want to solve this problem,” he said.

But NORML’s Armentano cautioned that this doesn’t mean individual cannabis consumers can stop fighting for change.

“In an environment where there may be competing corporate interests, the responsibility really falls upon the individual activist and social justice advocate to continue to push for responsible, common sense policy,” he told MintPress.

For example, he suggested big businesses might have an incentive to support more restrictive marijuana laws which limit the number of approved growers or ban home growing.

“One shouldn’t assume that those two entities will be advocating for the same policies. In some cases it might be very different policies that corporate interests are advocating for versus those of the individual.”

Activists hold an inflatable marijuana joint that reads "Obama, Deschedule Cannabis Now!" during the #Reschedule420 rally on Apr. 2, 2016 at the White House. (Flickr / Stephen Melkisethian)
Activists hold an inflatable marijuana joint that reads “Obama, Deschedule Cannabis Now!” during the #Reschedule420 rally on Apr. 2, 2016 at the White House. (Flickr / Stephen Melkisethian)

Left behind by legalization

The current patchwork of state laws, often in conflict with federal policy, leaves many people exposed to serious legal consequences for manufacturing, selling, or using marijuana. Even where reforms are in place, opportunities for legal procurement may elude some of the people most in need.

Amanda Chicago Lewis, a Buzzfeed news reporter, explained how the “weed boom” has actually perpetuated the systemic racism of the drug war in a March 16 investigation:

Even though research shows people of all races are about equally likely to have broken the law by growing, smoking, or selling marijuana, black people are much more likely to have been arrested for it. Black people are much more likely to have ended up with a criminal record because of it. And every state that has legalized medical or recreational marijuana bans people with drug felonies from working at, owning, investing in, or sitting on the board of a cannabis business. After having borne the brunt of the “war on drugs,” black Americans are now largely missing out on the economic opportunities created by legalization.

A study published March 21 by the Center on Juvenile and Criminal Justice backed up Lewis’ assertions that the benefits of reform are not distributed equally. While arrest rates are down overall, marijuana-related arrests continue to show a troubling racial disparity.

“In the states that reformed laws, rates of marijuana arrest have fallen by 71% among those under age 21, 79% among those over 21, 80% among African Americans, and 76% among all other (nonblack) races,” wrote Mike Males, a senior research fellow at the center and author of the study.

However, he found “reforms have not reduced racial disparities in arrest rates.”

“In three of the five reform states (Colorado, Washington, and Connecticut), disparities in arrests rates of blacks versus non-blacks remained roughly the same; in one (Massachusetts), disparities increased substantially; and in one (California), they fell. In states that did not reform marijuana laws, African Americans remained 3 times more likely than other races to be arrested for marijuana throughout the period.”

“I am surprised and disappointed by this,” Males told The Washington Post. “The forces that contribute to racial disparities under prohibition are clearly still in place after legalization.”

Armentano, of NORML, told MintPress that this racial disparity is “one of several major issues that in the coming years is going to need to be addressed, just as the social use issue is going to have to be addressed.”

Currently, the issue of whether pot can be used socially in specially-designated cafes or bars is still widely contested in states with recreational marijuana laws.

There are also labor issues tied to legalization. Armentanto explained:

The issue of drug testing in the workplace is going to have to be revisited again. It is absurd to have employees in states that no longer criminalize the use of cannabis and actually sanction the production and retail sales of it, but, at the same time, those same individuals, if they comply with the law, and engage in legal cannabis use, can show up to work and be fired.

Medical marijuana patients also face a confusing and dangerous struggle to obtain treatment. 23 states and Washington, D.C., offer some form of medical marijuana, and a handful of other states have adopted laws that limit access to only CBD oil, a cannabis derivative. These laws vary widely, limiting the types of treatment and the qualifying conditions. A March 22 report by the Brookings Institution condemned what author John Hudak called “the medical marijuana mess.”

For example, even in states that offer medical marijuana, doctors may still be unable to prescribe the substance:

[D]octors cannot write prescriptions for marijuana. Instead they must offer “recommendations,” because to write “marijuana” on a prescription pad is a fast path to losing their prescribing rights—and their livelihood.

Such problems stem directly from rules issued by the U.S. Drug Enforcement Administration … which is the federal agency responsible for regulating controlled substances. The DEA determines who can prescribe which drugs and under what conditions. Violating those rules has consequences: jail time, fines, loss of medical privileges for healthcare professionals, and asset seizure to name a few.

Under federal law, there are no conditions that allow a doctor to prescribe marijuana, a pharmacy to dispense it, or a patient to buy or use it. Marijuana is illegal. Period.

Mnar Muhawesh, editor-in-chief of MintPress and host of “Behind The Headline,” wrote that these drug laws often turn patients into cannabis refugees, forcing them to move across the country just to legally try a treatment that remains experimental, in part, because the war on drugs also makes research far more difficult.

“The nation’s own draconian drug laws are at least partly to blame for the lack of research in this regard,” she reported. “The federal government has conceded that CBD and THC may have some medical value, but only as a separate, single molecules. That’s why the whole plant remains classed as a ‘dangerous’ Schedule I drug.”

Watch “Draconian Drug Laws Continue To Create Families Of ‘Cannabis Refugees’” from “Behind The Headline”:

There was one small sign of progress for patients last month. Patients who seek prescription painkillers often face repeated drug tests, but a March 18 CDC memo aimed at curbing the opiate addiction epidemic also advised doctors to stop testing for patients for marijuana use.

“Typically, these patients are required to test free of any illegal substances, including medical marijuana, before being allowed to participate and/or continue in a pain treatment plan,” wrote Mike Adams on March 23 in High Times magazine.

“However, the latest CDC guidelines suggest that this old philosophy leads to ‘stigmatization’ and ‘inappropriate termination of care,’ which inevitably creates additional hardships for those patients in need of these types of treatment programs.”

Moving forward: Shaping marijuana policy

Armentano, of NORML, cautioned that marijuana legalization is very much a work in progress, thanks in part to the way the law is written in the United States:

The changes in marijuana policy occur numerous ways. One way they occur is through the [ballot] initiative process in the handful of jurisdictions that allow it. Another way they occur is through the legislative process. And there are significant differences in those processes.

With an initiative, the proponents of a proposal largely get to write in the regulations that they want. In the legislative process, there’s compromises that take place every step of the way and you have much less control over what that finished product might look like.

He compared the process of marijuana legalization to the aftermath of Prohibition.

“It is not as if when the federal government abolished alcohol prohibition and left it up to the states in the 1930s that the policies that were initially proposed and implemented by the states to regulate alcohol then are the policies we have now. Those policies have changed dramatically over time. They’re still changing over time.”

Overall, he stressed the importance of incremental progress in ending the war on marijuana.

“We believe we are in a better position to argue for and leverage for more common sense policies in an environment where cannabis is no longer contraband and is no longer criminalized,” than one in which it remains an illegal activity.

He added: “We are not going to go from absolute prohibition to a utopian regulatory policy in one step. That simply defies any pragmatism to think that would be the case.”

That’s where organizations like NORML and cannabis activists from all walks of life, can contribute to the solution. The hardest work, he says, is yet to come:

Arguably the greatest battle is to be made after you’ve begun to make gains and inroads, because then you have to go from theory to practice. We have to go from the theory of legalizing marijuana, to implementing what does the best system for legalization look like. And that’s what we’re going to have to advocate for in the next phase.